Compliance push raises I-T filing: CBDT chairman
The corporate tax returns filed by businesses have risen by 70,000 to 986,000
NEW DELHI: In tandem with record collections, the number of direct tax returns too have jumped for assessment year 2021-22, Central Board of Direct Taxes (CBDT) chairman J B Mohapatra said, crediting compliance enforcement through tax deducted at source and sharing of transaction details available with the tax department.
In an interview, Mahapatra spoke of a massive rise in returns filed by businesses in particular -- a notable departure in a country where tax compliance has been historically low.
While overall tax returns have jumped to 71.4 million in assessment year 2021-22 from 69.7 million in the year before, corporate tax returns filed by businesses have risen by 70,000 to 986,000. This near 8% jump in corporate tax returns is the highest in recent years, said Mohapatra.
Between assessment year 2018-19 and 2019-20, the increase in corporate tax returns reported was 43,000 and between assessment year 2019-20 and 2020-21, there was an increase of around 32,000, said Mohapatra.
“But in AY22, it has increased by 70,000. That also would have impacted the overall growth in the corporate tax collections,” he said. Assessment year refers to returns for income earned in the previous financial year.
The growth in returns suggests a widening of the tax base and formalisation of the economy, which adds to what economists call “tax buoyancy”, when tax revenue increases in an expanding economy.
However, the remarkable aspect of this particular jump in returns is that it has come in a year marked by a pandemic-induced contraction in the economy. And that is put down to compliance enforcement.
The finance ministry on Friday reported a 33% year-on-year jump in gross corporate tax collections to ₹8.59 trillion in FY22, for which returns will be filed later this year. Personal income tax collection in FY22 stood at ₹7.49 lakh crore, a jump of 32%.
“Data analytics, better coordination between tax department and other agencies, wider tax deducted at source (TDS) coverage, improved annual information statement (AIS) and greater communication with tax payers have contributed to this growth,” said the CBDT Chairman.
AIS is a comprehensive statement of all details of the financial transactions made by the tax payer during a financial year, which is available with the department. The department has been urging assessees to refer to this statement while filing their returns, so that they don’t miss out on any income.
In FY21, the income tax department collected over ₹12.1 lakh crore in gross direct taxes, a tad below the collections made in the year before, in spite of the fact that the economy had contracted 6.6% in FY21, indicating the effect compliance improvement has had on direct tax collections.
In addition to corporate tax returns, all other return forms filed in 2021-22 too have seen an improvement, said Mohapatra. That includes ITR-1 filed by individuals with below ₹50 lakh income from salary and ownership of one house; as well as returns filed in form ITR-2 by persons reporting capital gains, income from more than one house or who are directors in companies.